This study explores the financial sustainability of microfinance institutions (MFIs) in the economic context to identify how macro-level economic decisions affect the micro-level decisions in the microfinance sector in South Asia. For that purpose, the data of 409 South Asian MFIs combined with the macroeconomic variables of respective countries are used over the period 1999–2017. The empirical analysis uses a fixed-effect model (FEM) to analyse the unbalance panel data of microfinance institutions and macroeconomic variables. We employ two-stage least squares (2SLS) model for robustness and System Generalized Method of Moment (GMM) to address the potential endogeneity and over-identification bias. The results reveal that economic indicators such as foreign investment, human development, inflation, interest rate, private credit, and labour force participation have negatively influenced financial sustainability except for the GDP growth. The overall economic results seem imperative from the good-governance perspective of MFIs. Besides, the government and microfinance policymakers need to give due consideration to the macro-level economic decisions to achieve the financial sustainability of MFIs.

JEL Classification: A12, G21, G28, O1, Q01

这项研究探讨了在经济背景下小额信贷机构（MFI）的财务可持续性，以确定宏观经济决策如何影响南亚小额信贷部门的微观决策。为此目的，使用了1999年至2017年期间409个南亚小额信贷机构的数据以及相应国家的宏观经济变量。实证分析使用固定效应模型（FEM）分析小额信贷机构的不平衡面板数据和宏观经济变量。我们采用两阶段最小二乘（2SLS）模型来增强鲁棒性，并采用系统通用矩量法（GMM）来解决潜在的内生性和过度识别偏差。结果表明，诸如外国投资，人类发展，通货膨胀，利率，私人信贷，除GDP增长外，劳动力参与也对金融可持续性产生了负面影响。从小额信贷机构的善治角度来看，总体经济成果似乎势在必行。此外，政府和小额信贷决策者需要适当考虑宏观经济决策，以实现小额信贷机构的财务可持续性。

JEL分类： A12，G21，G28，O1，Q01